Sprott: WGC gold supply stats "misrepresent reality"

In an open letter to the World Gold Council, precious metals investor Eric Sprott (PHYS, PSLV) excoriates the group for abetting the decline in gold prices with faulty statistics, mostly as it relates to Asia.

The WGC pegs gold production at a robust 2.8K tons this year, but this includes gold mined in China and Russia which is used solely for domestic demand, says Sprott. Adjusting for this, Sprott sees total mine supply this year of 2.14K tons. Making adjustments to better represent consumption from emerging markets, Sprott sees annual demand of 5.2K tons, and thus supply being about 3K tons in shortfall.

"I urge the leaders of the WGC, for the benefit of their own members, to improve the quality of their data and find alternative sources than the GFMS, which paints a misleading picture of the real demand for gold. This lack of quality information has certainly been one of the driving factors behind the lack of investors’ confidence towards gold as an investment."


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Comments (5)
  • Marco Mazzocco, CFA
    , contributor
    Comments (193) | Send Message
    Is this a bull crying or is there merit to this ?
    23 Oct 2013, 12:41 PM Reply Like
  • th3decider
    , contributor
    Comments (481) | Send Message
    The internet has this cool thing called "links" you can just click on, like the one in the first sentence of the article. You can then read and decide on your own if his letter, which cites sources for all his numbers, is legit or not.
    23 Oct 2013, 01:34 PM Reply Like
  • Marco Mazzocco, CFA
    , contributor
    Comments (193) | Send Message
    "I make some in-house adjustments to better represent demand from emerging markets"


    I guess that is a source which I will choose to be skeptical of.
    23 Oct 2013, 01:42 PM Reply Like
  • Ray_Rich
    , contributor
    Comments (55) | Send Message
    If you are interested in gold/precious metals you should read a bit about Eric Sprott.


    I would say he is a Bull for sure, but he is one of the biggest players in Precious Metal Investing so there is merit to his comments. Especially if he is writing an open letter.
    23 Oct 2013, 03:11 PM Reply Like
  • Marco Mazzocco, CFA
    , contributor
    Comments (193) | Send Message
    The worst things a trader / investor can do, is to not recognize thier biases and not incorporate new information into thier strategies. The price action of gold has given plenty of signals as to how it should be handled. I would say that way is with great caution.
    23 Oct 2013, 01:59 PM Reply Like
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